Urban Outfitters group posts surprise quarterly sales surge
today Nov 21, 2017
Sales for US fashion group Urban Outfitters in the third quarter of the 2017-18 fiscal year were worth $892.8 million (€761 million), compared to $862.5 million last year, equivalent to a 3.5% rise on a yearly basis (+1% in like-for-like terms). It was a record quarterly result, and one which surprised financial analysts, who predicted a revenue of $861 million for the quarter ending on 31st October.
The positive performance was driven by comp sales growth generated by the group's Free People (+5%) and Anthropologie (+2%) labels, though the group's leading brand, Urban Outfitters, was on the up too (+1%). As for the group's net income, it fell slightly, down to $45.1 million, compared to the $47.4 million produced a year earlier.
Frank Conforti, the group's CFO, said that "store traffic improved in the quarter, thanks to a strong increase in the European market," without however providing details on any of the regions. What he did tell the analysts was that retail sales for Urban Outfitters stores in North America are still declining.
Altogether, the group operates 616 stores, the majority of them located in North America. In Europe, it currently operates 57 stores, of which 46 with the Urban Outfitters brand and 11 with Anthropologie. The group's labels are all still planning to expand in Europe. Urban Outfitters will open its first Parisian flagship store in rue de Rivoli, as revealed by real estate specialists Knight Frank, and is also set to open its first store in Italy, in Milan, soon.
Also Free People is broadening its European footprint. Sheila Harrington, the womenswear label's President, said that a wholesale distribution deal has been struck with a French distributor, and similar agreements for Italy and Spain are also expected to be signed in the fourth quarter. In the third quarter, Free People's international revenue leapt 26% thanks to the wholesale channel and the e-tail business.
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